ANZ to pay $10m in penalties


ANZ Banking Group has been ordered to pay $10 million in penalties by the Federal Court of Australia after the bank engaged in “unconscionable conduct” and breached its obligations as a financial services licensee.
The court found between August 2003 and September 2015, ANZ charged certain fees to personal and business customers in relation to periodic payments including:
- Fees charged for periodic payments that could not be made due to insufficient funds in the customer’s account (non-payment fees); and
- Transaction fees charged for successful periodic payments (transaction fees).
The Australian Securities and Investments Commission (ASIC) said ANZ was not entitled to charge non-payment fees or transaction fees to customers where the periodic payment was made between two accounts held in the same customer name (same-name fee).
ASIC deputy chair, Daniel Crennan, said: “The outcome and penalty imposed by the court is a strong deterrent message and reflects ASIC’s position that ANZ lacked contractual entitlement to charge these particular fees. ASIC, through its Office of Enforcement, has held ANZ to account for this conduct.
“ASIC acknowledges the cooperative approach taken by ANZ to this litigation, which allowed the matter to be efficiently resolved by the court. It is in the public interest that parties to regulatory litigation cooperate where possible.”
ANZ also admitted that around 11 July, 2011, the bank knew there was a risk they were not entitled to charge same-name fees to non-loan retail and commercial customers after receiving communications from its external lawyers.
However, the bank continued to charge them until September, 2015.
The court declared that the bank:
- Engaged in unconscionable conduct on 327,895 occasions, in contravention of s12CB of the Australian Securities and Investments Commission Act 2001 (ASIC Act);
- Breached its general obligation to comply with the financial services laws, in contravention of s912A(1)(c) of the Corporations Act 2001 (Corporations Act); and
- Failed to do all things necessary to ensure that the financial services covered by ANZ’s Australian financial services licence were provided efficiently, honestly and fairly, in contravention of s912A(1)(a) of the Corporations Act.
The bank also admitted it did not make remediation payments to customers who were charged same-name fees between 11 July, 2005, and 31 December, 2007, and the court declared that it:
- Engaged in unconscionable conduct on two occasions, in contravention of s12CB of the ASIC Act;
- Breached its general obligation to comply with the financial services laws, in contravention of s912A(1)(c) of the Corporations Act; and
- Failed to do all things necessary to ensure that the financial services covered by ANZ’s Australian financial services licence were provided efficiently, honestly and fairly, in contravention of s912A(1)(a) of the Corporations Act.
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